Life Insurance FAQ — MDC Family Financial

Question 1

Do I really need life insurance?

Accepted Answer

If anyone depends on your income — a spouse, children, aging parents — then yes, life insurance is one of the most important financial tools you can have. It ensures that if something happens to you, the people you love aren't left struggling financially.

Question 2

How much life insurance do I need?

Accepted Answer

A common starting point is 10–12 times your annual income, but the right amount depends on your specific situation — your debts, your family's expenses, your income replacement needs, and your goals. We'll help you work through the numbers.

Question 3

When is the best time to buy life insurance?

Accepted Answer

The best time is now. Premiums are based largely on your age and health, so the younger and healthier you are when you apply, the lower your rates will be. Waiting almost always means paying more.

Question 4

What's the difference between term and permanent life insurance?

Accepted Answer

Term life covers you for a set period (10, 20, or 30 years) and is the most affordable option. Permanent life insurance (whole life, universal life) covers you for your entire lifetime and builds cash value over time. The right choice depends on your goals and budget.

Question 5

What factors affect my premium?

Accepted Answer

Your age, health history, tobacco use, occupation, hobbies, and the type and amount of coverage you choose all affect your premium. Generally, younger and healthier applicants pay less.

Question 6

Can my premium increase over time?

Accepted Answer

It depends on the policy type. Term life premiums are typically locked in for the duration of the term. Whole life premiums are fixed for life. Some universal life policies have more flexibility, which can affect costs over time.

Question 7

Is life insurance affordable on a tight budget?

Accepted Answer

Yes — especially term life insurance. A healthy 30-year-old can often get $500,000 in term coverage for less than $30 per month. We'll help you find the most coverage for your budget.

Question 8

Who should I name as my beneficiary?

Accepted Answer

Most people name a spouse, children, or other close family members. You can name multiple beneficiaries and specify how the benefit is divided. It's important to keep your beneficiary designations up to date, especially after major life events like marriage, divorce, or the birth of a child.

Question 9

How does the claims process work?

Accepted Answer

When a policyholder passes away, the beneficiary contacts the insurance company to file a claim. They'll need to provide a death certificate and complete a claim form. Most claims are paid within 30 days of receiving all required documents.

Question 10

Are life insurance death benefits taxable?

Accepted Answer

In most cases, life insurance death benefits paid to beneficiaries are not subject to federal income tax. However, there can be estate tax implications in certain situations. We recommend consulting a tax advisor for your specific circumstances.

Question 11

Do I need a medical exam to get life insurance?

Accepted Answer

It depends on the policy. Many term life policies require a medical exam, but there are also no-exam options available — typically at a slightly higher premium. Final expense policies often require no medical exam at all.

Question 12

How long does it take to get approved?

Accepted Answer

It varies. Some no-exam policies can be approved in days. Policies requiring a medical exam typically take 2–6 weeks. We'll walk you through what to expect for the specific policy you're applying for.

Question 13

What if I have a pre-existing health condition?

Accepted Answer

Having a health condition doesn't necessarily disqualify you from getting life insurance. Many conditions are still insurable — sometimes at a higher premium. Final expense insurance is specifically designed for those who may not qualify for traditional policies.

Frequently Asked Questions

The Basics

Premiums & Cost

Beneficiaries & Claims

The Application Process

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